BitMart, one of the crypto industry’s longer-running centralized exchanges, is now facing a fresh insolvency claim just as it works through a multi-stage shutdown that has already frozen new deposits, spooked token holders and triggered a wave of withdrawal complaints. The accusation comes from a co-founder of OpenGradient, whose market-making team says it cannot pull its own balances off the platform — a claim that, if accurate, would deepen concerns already swirling around the exchange’s wind-down.
Summary
Key takeaways
- An OpenGradient co-founder alleges BitMart is insolvent after his market-making team’s funds got stuck on the platform, though the claim has not been independently verified.
- BitMart began a phased shutdown on July 26, halting new registrations and deposits, with all trading set to stop by 01:00 UTC on Aug. 26 and full platform closure scheduled for Jan. 31, 2027.
- Scandic Coin says roughly 21,898 USDT and 926,635 SNC submitted for withdrawal on July 26 remain unprocessed.
- Founder Sheldon Xia says BitMart has “not run away” and “will not run away,” but has not released reserve figures or a repayment schedule.
- US users tied to older accounts were told to withdraw remaining crypto by Aug. 8, 2026, at 23:59 UTC or risk facing further account restrictions.
Insolvency Claims Surface Amid Withdrawal Freeze
The insolvency claim against BitMart originated from a social media post rather than a regulatory filing, and it centers on frozen assets a market maker says it cannot access. That distinction matters — unverified allegations move fast in crypto, but they don’t automatically confirm a platform’s finances are broken.
Market Maker Alleges Frozen Assets and Liquidity Play
According to Matthew, an OpenGradient co-founder, his team’s balances are locked on BitMart and cannot be withdrawn because, in his words, the exchange is insolvent. He went further, alleging that BitMart kept encouraging token holders to lock funds on the platform roughly one week before halting the very services tied to those locked tokens. Matthew called the timing “shocking” and suggested the lockup push may have simply been “a play for liquidity” rather than a genuine product feature. BitMart had not issued a direct response to the allegation at the time of writing.
No Independent Verification of Insolvency
Matthew did not disclose the size or type of assets his team says are frozen, and no outside auditor or regulator has confirmed that BitMart is insolvent. There is, as of publication, no verified evidence establishing an asset shortfall at the exchange. Still, the accusation lands at a sensitive moment, adding to a pile of withdrawal complaints that have accumulated since BitMart announced its closure.
Phased Shutdown Timeline and Withdrawal Conditions
BitMart’s exit from the market is happening in stages, not all at once, and the exchange has framed the move as the outcome of a strategic review rather than a forced collapse. That framing is now being tested by user experience on the ground, where withdrawal delays have piled up alongside the insolvency allegation.
Shutdown Milestones and Service Terminations
The wind-down started on July 26, when BitMart stopped accepting new registrations, along with crypto and fiat deposits, at 01:30 UTC. New spot orders were cut off, and futures accounts moved into reduce-only mode. All spot, futures and other trading services are scheduled to end at 01:00 UTC on Aug. 26, and BitMart says its trading platform will fully terminate operations on Jan. 31, 2027 — an unusually long runway for a cryptocurrency exchange shutdown. The exchange has attributed the staggered timeline to a review of its business and changing market conditions rather than any single triggering event.
Withdrawal Availability and Security Procedures
BitMart maintains that withdrawals remain open throughout the process, but every request can pass through identity checks, source-of-funds reviews, wallet-ownership verification and sanctions screening. The exchange recommended customers submit withdrawal requests before 05:00 UTC on Aug. 26, warning that anything filed later would enter a separate process it has not yet fully explained. In practice, the added compliance layers have translated into real friction: reports indicate BitMart has been processing roughly 300 ETH withdrawals per hour since the announcement, a pace industry watchers describe as steady but strained under heavy demand. On-chain data tracked by CryptoQuant showed ETH withdrawal activity from BitMart hitting its highest level since July 2025 right after the shutdown news broke, with 58 wallets pulling out approximately $805,000 in the first 24 hours alone. The exchange’s native BMX token also took an immediate hit, falling between 58% and 63% within hours of the announcement as its utility tied to an active trading venue effectively evaporated.
Reported Withdrawal Delays and User Impact
Beyond the OpenGradient allegation, at least one other project has publicly flagged unprocessed withdrawal requests, which is exactly the kind of pattern that fuels an insolvency claim even without hard proof behind it. Meanwhile, a specific group of US-based users is contending with a separate compliance deadline layered on top of the general shutdown timeline.
Scandic Coin Highlights Frozen Withdrawals
Scandic Coin said withdrawal requests it submitted on July 26 — covering approximately 21,898 USDT, 926,635 SNC and another 256 USDT — remained unprocessed. The project stopped short of calling BitMart insolvent but pressed the exchange to provide verifiable proof that it holds enough liquidity to meet its obligations. That request echoes a broader theme running through the shutdown: users want evidence, not reassurance.
US Users Face Additional Restrictions and Withdrawal Deadline
BitMart stopped registering new US customers back in May 2022, but the exchange has acknowledged that some older accounts remain linked to US residents. Those affected users were instructed to close positions, redeem assets and withdraw remaining crypto by Aug. 8, 2026, at 23:59 UTC. BitMart warned that accounts left unresolved after that window could face further restrictions and additional compliance reviews — a narrower, faster deadline than the general Aug. 26 trading cutoff applied to the rest of the platform’s user base.
BitMart’s Response and Transparency Efforts
Founder statements and unreleased disclosures sit at the heart of why this story hasn’t been resolved. BitMart has pushed back on the idea that anything is wrong, but the evidence that would settle the question — a full reserve report — still hasn’t surfaced.
Founder Denies Misuse of Funds and Assures Stability
Sheldon Xia, BitMart’s founder, addressed the broader concerns directly on Aug. 8, saying the company had “not run away” and “will not run away.” He said the core team was conducting an asset inventory, consolidating holdings and keeping systems running, and promised further formal announcements. Xia did not, however, provide reserve figures, withdrawal-processing data or a repayment timetable — details that would go furthest toward settling the insolvency question one way or the other.
Pending Proof-of-Reserves Publication
BitMart said back in May that it was preparing to publish a proof-of-reserves report following earlier withdrawal complaints. That report still hasn’t appeared. Proof-of-reserves disclosures can demonstrate that an exchange controls assets matching customer balances, but they don’t establish solvency on their own unless users can also see the liabilities and off-chain obligations sitting on the other side of the ledger. Notably, the current situation echoes recent liquidity trouble at AscendEX, where delayed withdrawals and thin hot-wallet balances preceded that exchange’s own shutdown — though BitMart has not acknowledged any comparable asset shortfall.
For now, the exchange’s claim that its wind-down is orderly runs up against a growing list of frozen-withdrawal reports and an unresolved insolvency allegation. Whether BitMart can produce verifiable asset and liability data — and a clear timeline for clearing its withdrawal backlog — will determine whether this shutdown closes quietly or turns into something users end up chasing through other channels entirely.
FAQ
What insolvency allegations are made against BitMart?
An OpenGradient co-founder alleged that his market-making team’s funds are frozen on BitMart, which he claims is insolvent. There has been no independent verification of this insolvency claim.
Is BitMart still allowing withdrawals during its shutdown?
Yes, BitMart allows withdrawals, but they are subject to identity and security checks, reviews, and compliance procedures amid reported delays.
What is the timeline for BitMart’s shutdown and cessation of services?
BitMart started shutting down on July 26, 2026, stopping new registrations and deposits. All trading services are scheduled to end on Aug. 26, 2026, and platform operations will terminate on Jan. 31, 2027.
Are there specific restrictions for US users on BitMart?
Yes. BitMart stopped new US user registrations back in May 2022 and instructed existing US users to withdraw assets by Aug. 8, 2026, after which further restrictions and compliance checks may apply.
Article produced with the assistance of artificial intelligence and reviewed by the editorial team.
